Tokenomics, Staking and Incentives
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This page is under active maintenance and being updated regularly. Please check back for the latest info.
Align Incentives
Protocols with the deepest sustained liquidity often align incentives for all ecosystem actors. Betonchain pairs a strong product-market-fit with unique tokenomics to create and sustain attractive incentives for LPers and users.
Fair and Strategic Initial Distribution
A fair and strategic token distribution is essential for a community-owned protocol, Betonchain is no exception. It's part of our core mission to give back to early participants via a token that provides indirect access to the house edge.
BET is the ecosystem token of Betonchain. The BET token includes decentralized finance (DeFi) features like community governance, and utility via staking to provide house liquidity and access protocol PnL (house edge).
To deposit funds into Betonchain's liquidity pools and receive BETLP in return, LPers need to hold and stake BET. The max allowed deposit across stables for an LP is stakedBET * m . After staking BET, users receive stakedBET 1:1. The multiplier value m is set by the Betonchain DAO and might fluctuate to better align incentives under different conditions. A higher multiplier could be used to incentivize purchase of more BET for LPers, conversely a lower multiplier could be used to incentivize purchase of more stables for LPers.
stakedBET * m >= BETLP
BETLP governs protocol profit distribution.
Protocol PnL over LP rounds is in USDC, USDT and DAI. At the end of an LP round, all house profits are used to purchase BET and a stablecoin set by the DAO on decentralized exchanges (DEXs). The purchased BET and stablecoin is distributed across BETLP holders. Protocol profits are allocated based on an LP's share of volume hosted over a round. After every bet, new volume is attributed to active LPs based on their share of BETLP. Please visit this section for more details on depositing and withdrawing house liquidity to receive BETLP and LPer rewards.
The % split of protocol PnL used to purchase BET vs. stablecoin for distribution is set by the Betonchain DAO. This value might fluctuate based on betting volume over an LP round. Since over time higher volume would converge to higher protocol PnL, the % split might be weighted more towards the stable when volume is lower on the site and more towards BET when volume is higher.
Depositing house liquidity for BETLP bonds (locks) the corresponding stakedBET amount to qualify the liquidity deposit.
The bond lasts for a minimum of 48 hours (unstaking cooldown). Multiplier points apply to a minimum bond of 1 LP round (which yields the lowest BET APR, while a forever bond yields the highest).
BETLP holders can claim their share of rewards after the snapshot. In the future, users can claim, deposit and re-stake all rewards. The latter would stake all ofrewardsBET to receive stakedBET 1:1 and deposit m * stakedBET of stablecoin rewards to the liquidity pool, where m is the max allocation multiplier decided by the DAO.
The Betonchain DAO is allowed to change this max allocation multiplier at any time, including between an BETLP holder's initial liquidity deposit and their claim+deposit+re-stake.
Multiplier Points
The goal of multiplier points is to incentivize long-term staking while lowering the governance power and BET rewards share of new ecosystem actors (that have yet to accumulate multiplier points), while still encouraging them into Betonchain's ecosystem flywheel.
Multiplier points are an extension of the Incentives, and are governed and funded by the Betonchain DAO.
After depositing house liquidity for BETLP, you receive multiplier points for each LP round r you provided liquidity for based on the functionf(r) set by the Betonchain DAO. This function can be adjusted to better align incentives under different conditions. Assuming and a = 2 and b = 1, if you held BETLP for r = 3 LP rounds, you would earnlog2(3+1) = 2 multiplier points.
In comparison to a linear rate for multiplier points, these mechanics can incentivize new stakers, and mitigate the dilution of governance power to long-term stakers while incentivizing them to further grow their liquidity provisions (BETLP) in the protocol to earn more rewards.
So the total BET rewards from multiplier points for a LPer x are
The compute is off-chain. At the end of each LP round, a merkle root of the distribution is published on-chain, allowing users to claim their multiplier rewards from a contract using the DApp.
These incentives are meant to bootstrap DEX and house liquidity, allocate governance power, and drive volume. They are governed by the Betonchain DAO.
Airdrops will be conducted in several rounds aimed at dispersing governance to early adopters, active participants, and other projects pushing the Ethereum ecosystem forward.
While this incentive is active and funded by the DAO, users will receive BET tokens for every bet based on the chosen rewards model (ideally incorporating bet volume, type and consistency for each user). By giving back to users we encourage longevity and hedging for financially responsible betting.
Early house liquidity depositors can purchase discounted BET tokens over-the-counter based on their deposit share at that time. This is an incentive funded by the DAO.
DEX liquidity providers for qualified pairs will receive BET token rewards proportionally based on supplied liquidity (staked LP).
To incentivize liquidity providers for the BET-USDC pool on UniswapV3, BET will be rewarded to users that stake their ERC721 BET-USDC LP. Reward amounts are based on the BET share of a user's deposited LP. The minimum stake time is 1 LP round and the max is forever (ie. 2400 LP rounds or 200 years).
By integrating with uniswap-v3 contracts for distributing BET rewards over time to LPers, this incentive is for the most useful liquidity on BET positions. Rewards are distributed monthly, and the granular rewards compute for swaps over time can be done off-chain. Only in-range liquidity provisions can earn rewards.
The valid tick range for a position set by tickLower (int24) and tickUpper (int24), is supplied by the Betonchain DAO. Rewards are computed based on individual swaps, swaps where a users LP falls out of this valid range (ie. their tickLower is too low or their tickUpper is too high) won’t be considered for rewards. Reward amounts as computed by the off-chain scripts are based on the following factors:
Share of fees earned by the position (the virtual liquidity provided)
Share of BET in the position compared to total BET reserves in the liquidity pool
Share of USDC in the positions compared to total USDC reserves in the liquidity pool
Formula for computing rewardsBET applied to each in-range swap:
[(0.4 x (feesLP / feesTOTAL)) + (0.2 x (betLP / betTOTAL)) + (0.2 x (usdcLP / usdcTOTAL))] x boost_BETwhere TOTAL represents the entire liquidity pool and LP the position.
boost_BET is set by the DAO and corresponds to the BET share of the LP. At the end of each month, rewardsBET for an LPer address is summed for all in-range swaps, normalized 0 – 1, and then applied to the allocBET for that month. allocBET is the BET allocated to this incentive per month as set by the DAO.
A merkle root of the distribution is published on-chain, allowing DEX LPs to claim their BET rewards from a contract using the DApp. Even though an offchain script is doing the rewards compute, allocBET is still set by the DAO (and can be set to 0 in an emergency). This preserves trust via on-chain governance.
UniV3 Wrapper tooling for active liquidity management (on concentrated liquidity AMMs) can be applied on top of this framework so LPers can opt to have their positions managed for them.
LPers who use tooling for active liquidity management are responsible for ensuring rewards-earning liquidity ranges are aligned between the DAO and the third-party manager.
The total supply of LP and BET / USDC reserve amounts will fluctuate according to market conditions, as will the amounts of BET and USDC in a user's LP position. The formula for computing BET share from an LP amount is:
Betonchain's NFT provides holders with a daily allocation of risk-free bets and boosted BET rewards for all bets placed.
Monthly user parlay tournaments coming soon! Stay tuned on our Discord for updates.
